Mumbai: India's benchmark stock index rose to a two-and-a-half year high, led by steelmakers after JSW Steel Ltd. said it will consider raising funds, including selling shares to a strategic investor.
Tata Steel Ltd., the nation's biggest producer of the metal, climbed 1.9 per cent, and Jindal Steel & Power Ltd. gained 1.1 per cent. JSW Steel Ltd., the third-largest producer, increased 2.7 per cent, advancing for a sixth day.
The Bombay Stock Exchange's Sensitive Index, or Sensex, increased 135.92, or 0.8 per cent, to 18,113.15, its highest close since February 2008. The gauge reversed an earlier decline after reports showed unexpected growth in Europe's manufacturing and UK retail sales.
The S&P CNX Nifty Index on the National Stock Exchange climbed 0.8 per cent to 5,441.95. The BSE 200 Index rose 0.7 per cent to 2,306.24.
"Indian investors are looking at Europe and it's doing very well at present," said Vaibhav Sanghavi, a fund manager at Ambit Capital Ltd. in Mumbai. "It's really about sentiment more than anything else."
Tata Steel, the owner of Corus in the UK, climbed 1.9 per cent to Rs540.85. Jindal Steel rose 1.6 per cent to Rs646.95. JSW Steel advanced 2.1 per cent to Rs1,200.55. The company's board will decide on its fund-raising plan at a meeting on July 27, the company said yesterday in a statement to the Bombay Stock Exchange.
A composite index based on a survey of euro-area purchasing managers in both industries increased to 56.7 from 56 in June, London-based Markit Economics said yesterday. Economists had projected a drop to 55.5, the median of 18 estimates in a Bloomberg survey showed. A reading above 50 indicates expansion.
Dr. Reddy's slid 1.7 per cent to Rs1,380.7 after its stock rating was cut by Morgan Stanley analysts Sameer Baisiwala and Saniel Chandrawat, who cited its outperformance, "full" valuations and a moderation in earnings drivers.
Overseas funds bought a net Rs3.72 billion ($79.1 million, Rs297.6 million) of Indian equities on July 21.
